TMI Blog2010 (3) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... . Bapat for the Appellant. Rajneesh Arvind for the Respondent. ORDER D.K. Agarwal, Judicial Member. This appeal preferred by the assessee is directed against the order dated 30-3-2009 passed by the ld. CIT(A) for the assessment year pertaining to the block period 1-4-1987 to 15-9-1997. 2. Briefly stated facts of the case are that in this case assessment order was originally passed under section158BC of the Income-tax Act, 1961 (the Act), on 30-9-1999 where the total undisclosed income was determined at Rs. 17,89,270 as against the undisclosed income declared in the block return at Rs. 2,60,770. Against this order assessee preferred an appeal before the ld. CIT(A), who decided the appeal vide order dated 28-3-2001 giving certain relief to the assessee. Thereafter as a result of order under section 263 passed by the ld. CIT in respect of appeal effect order passed under section 250, another block assessment order was passed on 30-4-2004 and the total undisclosed income was determined at Rs. 16,12,770. As per this order, the additions made to the declared income are Rs. 1 lac towards household expenses, Rs. 5 lacs towards cash sale of scrap/machinery and Rs. 7,52,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed income. Thus the appellant did not follow the provisions of section 132(4A) to compute and declare his undisclosed income in the block return. The appellant intentionally attempted to reduce his tax liability and evade tax on his undisclosed income which had been computed by the department. He further observed that declaration made under section 132(4) is an admissible evidence which can be used in any proceeding under the Act. The appellant has not claimed that the statement was recorded under coercion or any kind of pressure. It is wrong on the part of the appellant to state as per his affidavit dated 8-3-1999 that his disclosure under section 132(4) was ad hoc in nature and without any particular basis or details. The ld. CIT(A) while distinguishing the decisions relied by the ld. Counsel for the assessee in CIT v. Calcutta Credit Corpn. [1987] 166 ITR 29/[1986] 28 Taxman 530 (Cal.) and in ITO v. Smt. Pramila Pratap Shah [2006] 100 ITD 160 (Mum.) held, that the penalty under section 158BFA(2) is leviable in the case of the appellant. However, the penalty should be levied on the basis of tax effect on that part of undisclosed income which is in the excess of the amount of und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer that the interest income should be considered in the hands of each partner as per division according to law in the case of the firm. The ld. Counsel for the assessee further submits that the Tribunal on the appeal filed by the assessee and the department, however, reversed the finding of the ld. CIT(A) in this regard and decided the issue against the assessee vide para 19 of its consolidated order dated 31-8-2005 passed in Bhalchandra B. Thakoor v. Dy. CIT [IT (SS) A Nos. 161 to 165 (Mum.) of 2001 and C.O. Nos. 213 to 217 (Mum.) of 2003, for the block period 1-4-1987 to 15-9-1997, dated 31-8-2005]. He further submits that since two Appellate Authorities took divergent views in the matter, therefore, it is a case of difference of opinion and it is settled law that on a difference of opinion penalty is not leviable. The reliance was also placed on the same decisions cited before the ld. CIT(A) i.e., Calcutta Credit Corpn.'s case (supra) and Smt. Pramila Pratap Shah's case (supra). He also placed reliance on the decision in CIT v. Dodsal Ltd. [2009] 312 ITR 112 (Bom.) for the proposition that the penalty is discretionary and not mandatory. He further submits that in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 19 corers to Shri Ramnik Chawda and he had received by way of interest for non-payment of sale consideration a sum of Rs. 3.76 lacs by cheque and cash of equal amount twice, i.e., Rs. 7.52 lacs by cheque and cash also received Rs. 7.52 lacs." 8. We further find that after the expiry of almost 15 months of making the said statement the assessee turned around to say that the unaccounted income admitted by him to be his own belonged to the firm and filed an affidavit dated 8-3-1999 to support his retraction. The Tribunal in the quantum appeal (supra), on this issue has not accepted the retraction made by the assessee after considering the facts and various case laws on the issue vide findings recorded in paras 12, 13, 17, 18 and 19 of its order dated 31-8-2005 as under : "12. We have considered the rival submissions. The short issue is whether unaccounted income admitted by the individual partners as their own income was income of the firm or not. It is true that all the partners had made their individual statements on oath under section 132(4) admitting the unaccounted income as their own income. They also offered it for taxation in their individual hands. The assessee, namely, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorize their use in evidence in any proceeding under the Income-tax Act. The burden is therefore squarely on the person who alleges that the statement was not made voluntarily to prove that it was involuntarily made or made under coercion or undue influence or that it was made under mistaken belief or was obtained by fraud or misrepresentation. Mere allegation will not suffice. Second situation is where the person seeking to retract proves, by leading cogent and reliable evidence, the erroneous or incorrect nature of the facts stated or confessed at the earliest possible opportunity. In the case before us, it is not the case of the assessee that his statement was obtained under duress or coercion. It is also not his case that the statement was not voluntarily made by him. The assessee has placed no evidence before us to show that the statement was made by the assessee under a mistaken belief. It is not a case where only the assessee, namely, Vasant B Thakoor has made the statement. Five brothers who are partners in the same firm have made statements admitting the unaccounted income to be their own. None of them even whispered that the unaccounted income which they were declaring a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e himself at the time of search that the cash represented his undisclosed income from which he subsequently sought to retract. It is thus a case of shifting explanations. The subsequent explanation by the assessee that the unaccounted income and cash belonged to the firm was neither spontaneous nor supported by any evidence. In the face of such shifting explanations and the inability of the assessee to substantiate the subsequent explanation with the help of reliable evidence, it is difficult for us to hold that the assessee had discharged the requisite burden of proof as envisaged by section 69A. The subsequent explanation of the assessee must therefore fail. 19. Considering all the facts and circumstances of the case, we are of the view that the Assessing Officer has rightly taxed the unaccounted income as unexplained income in the individual hands of the assessee. Ground No. 1 taken by the assessee fails while ground No. 3 in the Memorandum of Cross Objection taken by the department succeeds." From the fair reading of the above we find that the Tribunal has confirmed the addition of unaccounted income as unexplained income on the basis of acceptance of income in the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been accepted by the ld. CIT(A), while deleting the addition and hence, the basis on which the ld. CIT(A) has based his decision was not accepted by the Tribunal. Therefore, the decision relied on by the ld. Counsel for the assessee is distinguishable and not applicable to the facts of present case. 10. In Smt. Pramila Pratap Shah's case (supra), the Tribunal has upheld the order of the ld. CIT(A) in deleting the penalty on the ground that the assessee has discharged her onus in proving her bona fides. Whereas in the case before us it is not the case of the assessee that he was under the bona fide belief that the undisclosed income is not taxable, and hence, the decision relied on by the ld. Counsel for the assessee is distinguishable and not applicable to the facts of the present case. 11. In Dodsal Ltd.'s case (supra) it has been held that the penalty under section 158BFA(2) is discretionary and not mandatory. There is no quarrel on the above proposition of law and it is not the case of the revenue that the penalty is mandatory. 12. In Haryana Warehousing Corpn.'s case (supra), Their Lordships while distinguishing the decision in Union of India v. Dharmendra Tex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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